It’s past time for government to get in on the benefits of the online marketplace.
Mac Thornberry, Chairman of the House Armed Services Committee, thinks government ought to be able to take advantage of the robust world of online marketplaces (think Amazon or EBay). Thus, he has included in the House version of the 2018 defense authorization bill a provision authorizing just that. Since there is no similar language in the Senate bill, the provision will be decided in conference committee, although significant opposition jeopardizes its survival.
In truth, it shouldn't be a question at all. There is no reason the government cannot or should not be a part of this global shift. The only question should be how to make it work.
First, we have to answer the core question of the extent to which the government is willing to let go of longstanding acquisition policies and requirements. This is not a new question. In each stage of the decades-old movement to achieve real acquisition reform, some of the most important changes have been sub optimized by immovable orthodoxies. Think about the advent of the commercial buying authorities first created more than twenty years ago. Over the years, DoD in particular sought to water down or pull back those reforms. But Congress finally re-engaged and over the last two or three defense bills has reinforced its belief in the need for the government to break the stranglehold of the current acquisition process. The Thornberry proposal is yet another step in that journey, except now we know what to expect and what we have address in order to make it work. That’s where our focus needs to be.
For instance, the legislation declares that these established markets are to be considered “competitive” for the purposes of acquisition law. But are they? Do we have adequate insight and understanding of how they function, of the rules and math that govern dynamic pricing, and more, to ensure the government is getting the best price? Or, more fundamentally, given the vibrancy of these marketplaces, are we willing to let go of the traditional measures of competition?
Similarly, the legislation says that sales from small businesses that sell through these marketplaces are to be considered toward an agency’s small business goals. But here too, the transparency and validity of the means by which companies are defined as small (or self define as such) remains a question.
And then there is the requirement that the marketplaces report back to the government on every transaction. Will the government require Amazon and other companies to report the data in unique formats, with unique details to satisfy unique government requirements? Or are we prepared to accept more commercial-like information?
The list goes on: Labor practices and wage rates. Ethics programs. Audit provisions. There are any number of standing policies and practices that will have to be addressed in order to make the proposal work as designed.
These are critical, first-order questions and highlight why we can’t simply jump in with both feet without having done the requisite research and analytics. But there is a huge difference between opposing or questioning the efficacy of the proposal because of these complications and embracing it with a mind toward doing the hard work of addressing them and driving change. We’ve had too much experience with the former. Chairman Thornberry’s proposal again opens the door to a vital conversation.We should view the Thornberry proposal not just as a focal point for the next phase of acquisition reform, but as a natural next step in the digital transformation of government; a step that can dramatically improve efficiency and performance; one that can ultimately enable the government’s critical, organic acquisition resources to be focused on truly complex business and contract relationships, rather than devoting time to work that can be more effectively performed through automation and machine learning. It’s happening across the commercial sector. There’s no reason it can’t or shouldn’t happen in government as well.
So let’s hope the online marketplace provision survives conference and is included in the final bill. Sure, government never operate precisely like a business. But much of what the government buys—most of what the government buys—isn’t all that special or unique. And the emerging digital economy, including the ubiquitous availability of data of all kinds, and the related transparency that data provides, offers an extraordinary opportunity to really change the government paradigm. That’s the real power of the Thornberry proposal.
We can pose any number of reasons why the online marketplace proposal can’t work. We’d be far wiser to focus on how it can.